Home
Up
New Page 63

Co-brand Partnerships

award-5.gif (6517 bytes)

topsite.gif (1668 bytes)

webfifty.gif (6027 bytes)


 
drop_center.gif (2753 bytes)


wpe1.jpg (2095 bytes)


FREE EMAIL
Email Login
Password
New Users Sign Up!
 
MAILING LIST
Sign up for our weekly e-mail newsletter!
Tell Me More!

Enter your e-mail address
subscribe
unsubscribe
NEWS SEARCH
WEB DIRECTORY
WEB SEARCH
 CITY GUIDES
search by:
 WEATHER

Current Weather
Enter Your City, State, or Zipcode:

   

MASTERING
THE TRADE

ORIGINAL, INTERACTIVE SEMINAR ON TRADING USING
TECHNICAL ANALYSIS
 

 
EARNINGS ESTIMATES

Enter Symbol

U.S. QUOTES

Enter Symbol:

U.S. CHARTS

Enter Symbol:

TECHNICAL OPINION

Enter Symbol:

CANADIAN CHARTS

Enter Symbol


 SEC FILINGS

Search For:
 

Company Name
Ticker Symbol

 BROKER RESEARCH
Exclusive Broker

Research
Enter Ticker

 

 

 

 

The Traders Wheel
by Alan Farley


The Big W

Double Bottoms provide visual reference points that map the entire reversal process. Once located, these signposts identify most key price pivots and flash early warning signals when violated. The most common of these, The Big W, begins at the last major high printed by a downtrending stock, just prior to the first bottom. The first bounce after this low creates the center of the W as it retraces between 38% and 62% of that last downward move.

This rally fades and price descends back toward a test of the last bottom low. At this moment the trader listens closely for the first bell to ring. A wide range reversal bar (doji or hammer) may appear close to the low price of the last bottom. Or volume spikes sharply but price does not fail. Better yet, a Turtle Reversal develops where price violates the last low by a few ticks and then prints a sharp move back above support. Should any or all of these events occur, we mark the potential second leg on our Big W.

Trade entry can be initiated aggressively near the bottom of the second leg if the bells ring loudly. The top of the shorter move marking the partial retracement of the last downward impulse (middle of the W) now becomes our main pivot price for analysis and further trade entry. For price to successfully return to this point, it must retrace 100% of the last fall (from the second low). This finally breaks the lower high, lower low bear cycle. In strong DBs, price will quickly surge to this price right off the second bottom.

A less aggressive long position can be entered when this new impulse retraces strongly through 62% of the fall into the second low. However, if a short-term exit is desired, sufficient profit potential must exist between the entry and the pivot price for this trade to make sense. Longer-term traders can hold positions as price mounts this pivot. At this point, it will often pause to test support. However, another upward leg is then expected.

Price returning to the height of the middle of the Big W has a very high probability of surging beyond this point. Under normal conditions, it can easily retrace 100% of the original downward impulse, completing both the DB and Big W patterns. This tendency allows for further entry at the expected return test to the pivot point after the second surge has begun. The TIG chart provides an excellent example of this second chance opportunity.

bigw.gif (10343 bytes)

In 1996, property-casualty carrier TIG Holdings charted a double bottom volatility ride uncommon in insurance stocks. As price emerged from a small but powerful Turtle Reversal, it faithfully completed a classic double bottom variation: the outline of the letter W.

 

Article contributed by The HARD Right Edge, which presents highly original tutorials, strategies and resources on multi-trend technical analysis and and short term trading. Article reprinted here with permission, which presents highly original tutorials, strategies and resources on multi-trend technical analysis and and short term trading. Article reprinted here with permission.
 
 

 

 
Search for it at the TulipSearch Open Directory
Investment Bookstore Investment Newsstand Market Mavens Report

TULIPS AND BEARS NETWORK SITES

 

FINANCE
Tulips and Bears
Contrarian Investing.com
Internet Stock Talk
Traders Message Boards
Traders Press Bookstore

NEWS AND INFORMATION
TulipsWeather
Freewarestop.com
TulipsMail
TulipsEspa�ol
TulipSearch
TulipNews
TulipCards
AllMusicSearch.com
City Guides
Travel Center
Bargain Bloodhound

WEBMASTER TOOLS
TulipXchange
BecomeAnAffiliate.com
TulipDomains
GoSurfTo
TulipStats
TulipHost...coming soon
TulipTools...coming soon
TulipSubmit...coming soon




Questions or Comments? Contact Us

Copyright � 1998-2002 Tulips and Bears LLC.
All Rights Reserved.  Republication of this material,
including posting to message boards or news groups,
without the prior written consent of Tulips and Bears LLC
is strictly prohibited.  'Tulips and Bears' is a registered trademark of Tulips and Bears LLC


Last modified: April 02, 2001

Published By Tulips and Bears LLC